Nearly three years after it was first announced, the European Union's controversial proposal on chemical safety, known as "Registration, Evaluation and Authorization of Chemicals," or REACH, is now moving closer to becoming a reality. On November 17, the European Parliament gave preliminary approval to legislation that would implement the REACH. Shortly thereafter, on December 13, ministers from the 25 EU member-states (the so-called Council of Ministers) followed suit by passing their own version of the sweeping chemicals policy.

Arguably one of the most extensive regulatory reform proposals ever, REACH stands to radically transform the way thousands of chemicals that are either made or imported into the region are treated. Specifically, the program seeks to place the onus on industry to demonstrate the safety of virtually all chemicals offered for sale throughout the EU.

And, considering that EU officials have conservatively estimated industry compliance costs to reach up to $6 billion during the program's phase-in period alone, it is not surprising that the proposal has been hotly debated in the EU and abroad. Chemical producers and downstream users worldwide, in fact, argue that REACH will jeopardize their future competitiveness, while environmental and consumer groups describe the proposal as a necessity for protecting both the environment and human health.

The debate has been so comprehensive that the European Parliament and the EU Council of Ministers have been forced to make a number of changes to the plan that was originally put forward in 2003 (please see Capitol Comments, September 2003). But, now only a few hurdles remain to be cleared before the policy is implemented, and EU officials are predicting the law will take effect during the first half of 2007, with operational requirements set to begin in 2008.

Given the impact that this program is expected to have on companies that make, sell or use chemicals in Europe, this article will review some of the latest developments with the REACH effort.

Background

As it stands now, thousands of chemicals that are made and used in the EU are generally considered to be safe, and it is up to government officials to identify and test those they suspect may be hazardous to human health and/or the environment. According to the U.S. Government Accountability Office (GAO, the investigative arm of the U.S. Congress), there were 140 "high volume" chemicals singled out for risk assessments in the EU between 1993 and October 2003.

REACH would change all of that. Under the plan, all chemical substances that are made or imported into the EU in quantities greater than one ton would have to be registered with a proposed "European Chemicals Agency" to be based in Finland. Moreover, producers and importers would have to submit a dossier to the ECA with information including: 1) the physicochemical, toxicological and eco-toxicological properties of the substance; 2) a description of the various downstream uses of the substance or product; 3) any health and environmental risks related to the substance; and 4) a declaration of the means being used to manage those risks. If proper registration is not made, it will be illegal for a substance to be manufactured in—or imported to—any country in the EU.

Additionally, chemicals that are considered particularly risky (i.e., those known to cause cancer, mutations or cause reproductive issues in laboratory animals) would have to receive "use-specific" authorization before they could be cleared for market. Downstream users of any such chemical substance in the EU would still be allowed to use these substances, but they would have to let ECA know that they are using the them, obtain the substances from a company that has been granted specific authorization to sell it in the EU, and could only employ them for pre-approved uses.

As part of the implementation process, nearly 7000 public comments were filed in response to the original REACH proposal, with the bulk coming from industry, labor, environmental and governmental interests throughout the world. For its part, the Bush Administration has complained that REACH will impose "substantial costs with uncertain benefits" and has warned that the program might constitute a barrier to trade under rules of the World Trade Organization. The White House has also predicted that the economic burdens imposed by REACH will drive many small and medium-sized enterprises out of business and might unintentionally stifle innovation because money that had been earmarked for R&D could be redirected toward the fulfillment of REACH requirements.

Based largely on this massive input, the EU Parliament and Council of Ministers both engaged in extensive consultations with various interests as they crafted their respective versions of the policy proposal. One end result being that the legislation approved by Parliament in November contained more than 400 amendments to the original proposal, pared down from a list of more than a thousand changes.

Key modifications adopted by the EU Parliament include relaxed registration/mandatory testing requirements for substances produced or imported in volumes of 1-10 metric tons a year (provided they are not new formulations or considered to be "high risk") and exemptions from REACH for polymers and other chemicals used in scientific research. The Parliament legislation also set up a broadly discussed data-sharing arrangement known as "One Substance, One Registration" (OSOR) designed to minimize duplicate testing while providing an opt-out for businesses that can demonstrate legitimate concerns about protecting confidential information.

One the other hand, Parliament included some provisions that are more controversial. There is an amendment, for instance, that calls for a five-year expiration date on all authorizations of those substances deemed to be the most hazardous—a provision opposed by industry because it would subject impacted chemicals to bureaucratic review every five years with no consideration of how the substances are actually being used.

The Council of Ministers embraced many, but not all, of these changes in its revised REACH proposal this December. One key difference between the two is that Parliament's version requires that high risk substances be replaced with safer alternatives when possible, whereas the version approved by the Council of Ministers allows industries to continue using the more hazardous chemicals provided they can show that the dangers be "adequately controlled." Legislation approved by the Council of Ministers also rejected across-the-board, five year time limits on authorizations, stating that such limits should be issued on a case-by-case basis instead.

Next Steps

Members of the European Parliament and Council of Ministers are said to be anticipating long and contentious negotiations to reconcile the differences between the competing versions of the proposal. But, before differences can be hashed out, the Parliament's legislation must undergo a second reading, which is largely considered a formality but is not expected to occur until sometime in late 2006 due to the fact that the legislation must first be translated into all of the EU member country languages. Even still, EU officials are confident that the controversial REACH will be finalized in 2007.

For its part, INDA, Association of the Nonwoven Fabrics Industry, will continue to monitor and update its members on the developments related to this sweeping policy. For more information about REACH, please visit: http://europa.eu.int.